Managing an HOA can be a time-consuming job. When all the members of the board of directors are volunteers with full-time jobs, families, and social lives, taking care of the many aspects of property management can be difficult. This is why self-managed HOAs require financial management services.
In this article:
Financial Management Services for the Self-Managed HOA
An HOA board is typically made up of volunteers who often have other priorities. Sometimes, though, it can become too much. Before long, details can start to fall through the cracks. For smaller communities, it can be too expensive to hire a full property manager to tackle all aspects of HOA management.
Handling HOA finances is the most complicated and tedious aspect of association management. Thankfully, financial management companies are here to help. There are many benefits to hiring a company to handle just the financial aspects. In addition to saving the board of directors’ time, it can also relieve the stress that goes along with managing sensitive financial information. Ultimately, financial management companies offer much-needed support to homeowners associations for a fraction of the cost of full property managers.
Still on the fence? Here are the top reasons to hire financial management services for your self-managed HOA:
1. Make Collections a Breeze
One of the most time-consuming and important tasks in any community association is the regular billing and collection of HOA dues. Without money coming in, there would be no funding for community maintenance or new projects. Moreover, organizing labor at regular intervals to prepare bills and collect late fees can be hard to manage. As a result, your community will suffer.
HOA financial management services can take away some of that pressure by using their own labor and resources to prepare and send invoices to homeowners. In addition, these companies have teams of trained collection professionals who will work with your board of directors to create and implement a collections program that is right for your community.
2. Handle Payables Easily
Of course, receivables are only one part of financial management for HOAs. A financial management company can also keep track of payables and make sure that all vendor payments go out on time. The last thing a community wants is to go delinquent on payments and lose a vendor account. By leaving payables in the hands of experienced professionals, you never have to worry about missing an important bill again.
3. Detailed HOA Financial Reporting
The key to financial stability in your HOA is to ensure the keeping of detailed records for every dollar that passes through your community. By maintaining detailed records, your board of directors can make more accurate plans regarding the allocation of funds. Keeping up with financial statements such as balance sheets, statements of income, payables & receivables, bank statements, general ledgers, and reserve fund balances require certain expertise. These are best handled by a trained professional to ensure accuracy and give homeowners peace of mind.
You must prepare all financial reports on a regular basis. That interval varies depending on your community’s needs, along with state laws. Generally, it is best to prepare your HOA financial reports monthly or, for larger communities, quarterly. A financial management company can prepare all financial statements correctly and on time. This will help with audits and tax preparations required by law.
4. Get Expert Financial Advice
HOA and condo associations are managed by volunteers. Thus, it is common for them to have questions regarding the complicated nature of association finances. Not every community has a trained accountant available to assist with financial planning. Hiring a financial management company provides communities easy access to professionals to ensure that they are handling their finances properly and legally.
Taxes and audits can be some of the most stressful times for community associations. With so many rules to follow, it is hard to know for sure if everything is properly prepared. With financial management services, trained professionals will be right by your side. They will prepare all financial documentation and walk you step-by-step through the tax preparation and audit process. Beyond that, they will answer any questions and make sure that there are no surprises.
5. Homeowner Communication Services
Along with handling all association financial information, a financial management company can also assist with homeowner communication. A custom website will allow easy access to community information and allow for online bill payment. Residents can also use the website to request information or communicate with community management. Furthermore, association documents can be posted online to promote transparency between the board of directors and the homeowners.
In addition to the website, these financial management services also provide email, voice, and text messaging support. This way, the board can quickly and easily stay in touch with homeowners. After all, email blasts are an effective way to keep residents up to date on all community matters.
6. HOA Insurance Assistance
Insurance can be one of the largest expenses that a community must prepare for. Luckily, professionals typically work with some of the nation’s largest and most trusted insurance agencies. Therefore, they can help find a tailor-made policy for your community. Whether it is made up of single-family homes, townhomes, or condominiums, financial management companies can find a plan that fits in your budget. Additionally, companies like these can assist you in finding the best prices available.
7. Customized HOA Services
Of course, no two communities are the same. Each one has different needs and goals. Maybe you are trying to save up enough reserves for a community pool? Or perhaps you are just starting out and need help setting up financial reporting procedures? Trained professionals will work with your board of directors to get to know your community. After that, they can create a customized financial plan to assist you in reaching your unique goals.
Choosing the Right HOA Financial Management Company
One of the biggest disadvantages of a self-managed HOA is inexperience, particularly when it comes to finances. As such, it is best to outsource financial management services. This way, you can ensure the financial health of your community.
Not all HOA financial management companies are created equal. State and local laws vary immensely throughout the country. Make sure that the financial management company you select is knowledgeable with your area and provides the services that work best for your unique community.
If you are looking for the right HOA financial management company, don’t hesitate to give us a call.
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